Nokia (NYSE:NOK) just reported results for the first quarter of fiscal year 2014. The company also appointed Nokia insider Rajeev Suri as its next CEO, outlined its strategy now that the handset division has been transferred to Microsoft (NASDAQ:MSFT), and announced $7 billion of dividend, share buybacks, and debt reduction program.
Reacting to this profusion of news, Nokia shares surged 7% higher on the Helsinki exchange. American depositary receipts rose 8.3% in premarket action on the NYSE exchange.
Analysts expected Nokia to report total sales of $4.0 billion, yielding adjusted earnings of $0.04 per share. These estimates do not include the recently sold handset division, which now is classified as a discontinued operation. On that basis, Nokia reported a 15% year-over-year drop in total revenue, landing at $3.7 billion. Adjusted earnings came in at $0.06 per share, up from $0.01 per share a year ago.
Discontinued operations generated 30% lower sales year over year, and would have erased $0.08 from the Nokia group's total earnings per share.
New CEO Suri joined Nokia in 1995, and has previously held the CEO title in the Nokia-Siemens Networks business.
Under Suri, Nokia will aim to optimize each of its three core businesses -- networking infrastructure, HERE mapping services, and technology licensing -- separately. "Where it makes sense to do so, we will pursue shared opportunities between the businesses, but not at the expense of focus and discipline in each," said Suri in a prepared statement.
The Microsoft transaction enables the return of $7 billion to Nokia shareholders. Ordinary dividend payments will be restarted after a two-year pause, supplemented with a $1.4 billion special dividend payout. Nokia will spend $2.8 billion on a two-year debt reduction program, and will authorize $1.7 billion of share buybacks.